Mar 22, 2000 / vol 6 issue 32

The great American streetcar scandal

A little-known but far-reaching scheme played a decisive role in killing off the trolleys. It began with a brilliant marketing ploy hatched by a pair of brothers named Fitzgerald. These Wisconsin bus operators suddenly found a magic lamp: General Motors. Teaming up with Firestone Rubber and Standard Oil of California, the corporate giant formed a subsidiary corporation, National City Lines, and with one rub of the lamp the elder Fitzgerald found himself propelled to the presidency of an enterprise that stretched from coast to coast and from Canada to Mexico. He had his orders, and he followed them well.

The idea was simple. Starting in 1936, National City (in the East and South) and its subsidiaries American City Lines (Midwest) and Pacific City Lines (West) bought controlling interests in 146 trolley systems in the U.S. and Canada, using money laundered through several finance companies that were in on the scheme. The new managers were directed to abandon streetcar service and replace the trolleys with GM buses. Contracts were then signed ensuring the exclusive use of Firestone tires and rubber products, and Standard Oil fuels and lubricants. Vendors who had held contracts for decades were frozen out. GM, Firestone and Standard Oil sales zoomed, and profits went through the roof.

Many of those trolley systems were already in poor financial shape, some of them about to collapse, in the wake of 1935 federal anti-trust legislation (which, ironically, had mortally wounded many trolley companies by severing their connections to power companies and their access to cheap electricity). But others, particularly in the bigger cities, were healthy and getting healthier with the delivery of brand-new, ultramodern trolleys called "PCC cars" (small fleets of which are still operating in some American cities, providing comfortable, fast, safe service to thousands of commuters every day.)

Still, one by one, trollies disappeared from American streets. Monopoly? Clearly and a ruthless example of unrestrained free enterprise. But the whole matter would have gone unnoticed if not for E. Jay Quinby, an obscure naval officer stationed in Florida.

Quinby, a longtime trolley advocate from New Jersey, had shocked his wealthy parents by taking a blue-collar job operating a huge, interurban trolley between Paterson, N.J., and Ridgewood, N.Y., as his first job after college. When World War II came, he enlisted in the Navy and was stationed in Key West, Fla. He was still there when, in 1945, the conspirators resumed their temporarily delayed program.

Among the first to recognize the devastation that was taking place, Quinby prepared a detailed manifesto, which he sent to every mayor, city manager and member of Congress to everyone and anyone, in short, who had anything to do with governance, regulation, politics or transportation. The unholy trinity was quickly indicted under the Sherman Anti-trust Act and eventually found guilty. The corporations paid small fines, and seven key executives, also found guilty, were fined $1 apiece for their involvement. General Motors' appeal was denied: The convictions stood.

But the controversy persists to this day. GM apologists insist that there was no deliberate attempt to sabotage the electric-railway industry, or to dismantle U.S. trolley systems, yet that was the undeniable result.

And, though some maintain that the trolley systems would have died, anyway, extensive FBI files recently obtained by this writer under the Freedom of Information Act prove that the conspiracy was even more widespread than is generally known.

The wife of the U.S. postmaster general was investigated in St. Louis, as co-owner of a finance company that laundered money passing from GM to National City Lines. Commissioners in a Florida city each received a brand-new Cadillac and, the very next week, voted to scrap their trolley system, replacing the abandoned cars with GM buses. There is even suspicion of jury tampering, but none of this evidence was made public, either during or after the trial.

Al Mankoff

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Content: ©2004 Al Mankoff